I think it's a weird cross hatch that Atlus uses to their advantage. Yes, Homebrew and hacking on the DS is known by the video game crowd, but the DS install base is mainly the mainstream.
Atlus takes that mainstream and focuses on a very specific group: Anime and RPG fans. With this group, you have a new subset: anime fans love to have a physical product. I can't tell you how many anime series I bought even though I've already seen the show fansubbed online. The soundtracks and the artbooks and mini-posters do work in getting that group's attention, and you have to figure a CD costs pennies to print.
Yes, Atlus is in a niche, but I think when they are already limiting releases to 10,000 copies like Steal Princess, you have a game that's more likely to sell out and only be able to be played by some on a flashcart than Atlus not selling enough copies.